Germany as a Geo-economic Power

In the current crisis, German elites are doggedly pursuing a policy of “civilian power” (Zivilmacht) increasingly perceived in Europe as the continuation of Realpolitk by other means, writes Tony Corn in Small Wars Journal. Are we heading towards a “gentler, kinder German Reich”, but a Reich nevertheless?

“Demographically and economically, Germany is one third larger than either Britain or France. In the past ten years, this predominance has already been reflected in EU institutions, both quantitatively (Germany has the largest representation in the EU parliament) and qualitatively (the European Central Bank is a clone of the Bundesbank). But that’s apparently not good enough for Berlin, who has deliberately let the crisis move from the periphery (Greece and Portugal) to the center (Italy and France) in order to extract the maximum of concessions from the rest of Europe.”

Moreover, “Germany in the past decade has overtaken Britain and France as Europe’s main arms exporter” and is now “responsible for 47 percent of EU exports to China.”

“Germany is not only increasingly defining its national interest in economic terms, but also increasingly using its economic power to impose its own preferences on others in the context of a perceived zero-sum competition within the eurozone, rather than to promote greater cooperation in a perceived win-win situation.”

“German companies lobby the German government to make policy that promotes their interests; they in turn help politicians to maximize growth and in particular employment levels the key measure of success in German politics … Because much of this (German) growth has come from exports to economies such as China and Russia, where the state dominates business, (German) exporters are also conversely dependent on the German government.”

It is a typical mercantilist, Listian (from Friedrich List), policy.

“From 1871 to 1914, it is through civilian means … (mainly the 1879 alliance with Austria-Hungary) that the newly-created German empire proceeded to create in central Europe a greater informal empire known as Mitteleuropa. Even during the Great War, Germany’s main war aim was essentially to create a Europe-wide Customs Union (with a few annexations here and there).  … And from 1940 to 1945, the uncomfortable truth is that Nazi Germany created a “Central European Economic Community” which, in many ways, anticipated the “European Economic Community” created by the treaty of Rome (1957).”

In short, common markets have been consistently used by Germany as an instrument of “soft”, “civil” power and dominance. And on top of the common market, since 1999, the strong euro managed by the ECB in the tradition of the Deutsche Mark has been instrumental in reinforcing the German economy while at the same time strangling the southern European and French ones. A shrewd strategic move. 

The whole post here is serious food for thought.